Our monthly EBITDA is highly volatile due to seasonal project delivery, and we want to know if this variability signals to buyers that our business is not ready for sale. How do we use our weekly Scorecard and predicting abilities to smooth out this operational volatility before going to market?

Question

Tyler Smith · Accepted Answer

Buyers pay a premium for predictability. If your monthly EBITDA resembles a roller coaster, buyers will apply a steep discount to your valuation to account for the perceived risk. To prove your business is ready for a clean exit, you must demonstrate that you can predict your performance with high accuracy. This is where the EOS leadership skill of prediction becomes critical. Start by refining your weekly Scorecard. Your Scorecard should not just track lagging indicators like completed sales or monthly revenue; it must focus on leading operational indicators. These are metrics like weekly client onboarding milestones, resource utilization rates, and pipeline health. When you track these leading indicators weekly, you can spot operational bottlenecks three to four weeks before they hit your profit and loss statement. This allows your leadership team to run the IDS process in your Level 10 Meetings and solve issues before they impact your margins. Furthermore, your leadership team must build a track record of hitting their quarterly Rocks. If you can show a buyer three consecutive years of achieving eighty percent or more of your quarterly Rocks, you prove that your organization has the operational discipline to execute its strategic plans. High predictability signals to a buyer that your future cash flows are secure and worth the investment.